At the Governor's Ag Development Summit in Sioux Falls, S.D., a panel of ag bankers said they are concerned about how the changes in the farm program, land values, interest rates and grain prices will affect agriculture.
No big surprise there.
But Nate Franzen, First Dakota National Bank, Yankton, S.D., said that "what keeps him up at night" is worries about whether farmers are getting complacent.
Many have had several good years in a row.
But "good times won't last forever, he said, "and we need to be preparing ourselves."
What are the signs that you might be becoming complacent?
Not having a marketing plan might be No. 1, said Bob Schmidt, Farm Credit Services of America, Pierre, S.D., in an interview after the panel discussion. Corn won't stay at $7 per bushel forever.
Not taking steps to remove "structural" risks to your operation is another sign, he said.
All of the panelists said they expect interest rates to rise in the future. Bob Rutten, Citizens State Bank, Arlington, said he expects rate will stay stable until May 2012 and then begin rising.
Interest payments won't likely be one of the largest per acre costs farmers and ranchers will have, even if rates go up from about 4% currently to 7% or 8% in the near future, but rising rates will increase all input costs, too.
If Congress and the President don't agree to raise the debt limit, however, interest rates could rise dramatically.
The panelists agreed that land values may decline in the future, but the drop wouldn't create a 1980s-style farm crisis. Farmers don't have as much debt and lenders have required buyers put up more cash or collateral than in the 1980s.
Higher credit requirements have made it harder for beginning farmers to buy land, though. The panelists said there are still opportunities for the right person in the right situation.
The Farm Service Agency's beginning farmer loan program can be a big help, said Steve Dutenhoffer, Dacotah Bank, Watertown. It would help young and beginning farmers if Congress increased funding and made the funding more consistent, he said.